IBM Business Analytics Helps Papa Gino’s Grab a Bigger Slice of the Pie

IBM (NYSE: IBM) today announced that Boston-area based pizza chain Papa Gino’s has turned to IBM business analytics software to help better meet customer expectations for on-time, anywhere pizza deliveries in 30 minutes or less — with food ordering capabilities now available through a new iPhone application.

Analytics has given Papa Gino’s increased visibility into the performance of its online customer loyalty campaign, which has recently boasted a 50 percent increase in the total of an average order.

The company now has the ability to compare this and other performance data from all of its marketing and promotions activities with pizza sales and frequency of transactions — and then measure them against the company’s performance goals. As a result, Papa Gino’s can tailor its mobile commerce campaign more effectively to help increase both the average ticket price as well as ordering frequency.

Today, Papa Gino’s new customer loyalty program allows pizza lovers in New England to quickly and easily receive promotions on discounted meals through their preferred delivery method of text messages* and redeem reward dollars for take-out or dine-in pizzas.

Trends such as the explosion of mobile shopping, the proliferation of smart phones, and the drive to better harness data through the social web to drive results have transformed the way midsize firms do business.

In fact, some 72 percent of CIOs in midsize companies who took part in a recent IBM survey** say they plan to invest in mobile applications to drive commerce. At the same time, 83 percent plan to invest in business analytics to turn data into actionable information, such as customer preferences.

Papa Gino’s 280 restaurants in the New England area include two restaurant brands: the Papa Gino’s pizzeria chain, plus a grilled sandwich shop chain called D’Angelo. As both chains continue to expand in the Northeast U.S., the mid-size company has collaborated with IBM Business Partner QueBIT to implement IBM analytics software.

As the company looked to implement new strategies to stay ahead in the competitive restaurant industry, Papa Gino’s sought to use business analytics to track data from its email-driven customer rewards program to measure the impact on transactions throughout the course of the campaign. The program alerts customers about the number of points or reward dollars they can spend on meal purchases.

Using data gathered from its ordering database, the company can now target different promotions to customers depending on how frequently they order from Papa Gino’s. By tracking responses to different offers, the company has been able to be more effective in driving responses while increasing profitability.

Business analytics has also helped Papa Gino’s more effectively tailor its online ordering campaigns to drive both an increase in value of the average ticket and the frequency of orders. For example, the company found that with online ordering, there was a significant increase in the amount of food ordered per ticket but no increase in frequency. With the loyalty rewards, there was little increase in tickets but the frequency jumped significantly. Now, Papa Gino’s has been able to better tailor its marketing campaign to both help increase the average ticket price as well as ordering frequency. The customer rewards program has helped increase the average ticket generated through online ordering by an average of 50 percent.

“We are finding as more and more people join our rewards program our transaction count grows significantly. That’s not something we would have been able to tell as easily without being able to track and analyze that data on customer feedback and response,” said Paul Valle, chief information officer of Papa Gino’s.

Prior to using business analytics, Papa Gino’s struggled with drawing intelligence from multiple sources of disparate information. Managers often spent 80 percent of their time just gathering data and less time acting upon it. Now, managers can spend more of their time focusing on the data that can make a difference to the restaurant, for example, avoiding excessive labor costs from mismanaged staff scheduling — or conversely, duplicating efficient practices throughout the chain.

For example, store managers have complete visibility into the last trending weeks of sales and their prior year sales for those same weeks. Receiving those daily reports helps the store managers staff according to anticipated volume and make sure they’re in tune with their sales forecasts. By rolling up the store staffing forecasts to districts and regions, the executives can also monitor whether the labor forecast is aligned with sales forecasts and step in if it is not.

Today, Papa Gino’s is looking to apply analytics to better help employees access real-time data through mobile devices. For example, district managers will be using tablets such as iPads and smart phones to instantly access information to better help them review and respond to data about orders, inventory and sales instantly as they work with store managers. Papa Gino’s is looking to business analytics as a proof of concept in the stores’ kitchens in order to track all the points in the pizza making process, from hand tossing the dough to boxing the pie.

“Our district managers used to spend hours a day pulling together all their information. Now they can spend hours a day doing something about the information,” said Valle. “We’re confident in our ability to gather and use this data intelligently. It’s truly the future of how we are going to run our business here.”

To find out how IBM and our Business Partners are working with thousands of midsize companies around the world, visit: www.ibm.com/engines.

**These findings are the results of “The Essential CIO” Midmarket CIO Study 2011 — part of the Global CIO Study conducted by IBM Global Business Services and the IBM Institute for Business Value (IBV).

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